FDD Items 3 & 4 · 2023 filing
American Freight litigation history
What American Freight disclosed about lawsuits, arbitrations and bankruptcy in the 2023 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 & 4 at a glance
What the filing discloses
- Cases disclosed
- 2
- Item 3, as counted in the filing
- Largest disclosed settlement
- None stated
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2023
- Disclosures cover the prior ten years
Extracted from the 2023 Franchise Disclosure Document
Item 3: litigation
2 matters disclosed both related to Buddy's affiliate: (1) MMS Group LLC v. Buddy's Franchising AAA arbitration (pending); (2) In the Matter of Buddy's Newco LLC FTC Matter No. 191 0074 (concluded). No litigation required to be disclosed for American Freight Franchisor, LLC.
Disclosure signals that moved the score
How this shows up in the verdict
- No going concern status raises questions about corporate financial stability and ability to support franchisees
- Affiliate litigation (Buddy's) involving breach of contract and FTC antitrust settlement indicates corporate governance and competitive practice concerns
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?